Five Health Insurance Terms You Should Know

Your premium is the amount that you pay your insurance provider in exchange for health care coverage under your health insurance policy. Your total health insurance premium for the year is typically broken down into twelve monthly premiums.

For example, if the annual health insurance premium for the plan you choose is $1,800, then you will pay twelve monthly installments of $150 for health care coverage.

A deductible is the amount of money you must annually pay out-of-pocket before your insurance provider will make any benefit payments.

For example, if you have a $2,000 deductible, you are responsible for paying the first $2,000 of covered medical expenses out-of-pocket before your insurance provider will cover any percentage of the bill.

Your copay is a flat rate that you must pay out-of-pocket for a covered medical service. In most cases, copays do not count towards meeting your deductible.

For example, if the health insurance plan that you choose has a $20 copay for in-network physician or urgent care visits, then you will need to pay $20 every time you see an in-network physician or visit an urgent care facility.

Coinsurance refers to the percentage of medical payments that you are responsible for paying out-of-pocket after your deductible has been met. The remaining percentage is paid by your insurance company.

For example, if your coinsurance rate is 20%, then you will pay for 20% of any covered medical services you receive (after you meet your deductible) and your insurance provider will pay the remaining 80% of the bill.

An out-of-pocket maximum is a set dollar amount that limits how much you have to pay out-of-pocket annually for medical services that are covered by the insurance plan that you choose.

For example, if your annual out-of-pocket maximum is $2,500, then you will not be required to pay coinsurance for the remainder of the year after you make a total of $2,500 in qualifying out-of-pocket payments.

For more information about health insurance and any terminology that you would like to understand further, visit us today at www.WNCHealthInsurance.com.